Top 5 Government Business Loan Schemes in India

1) SME Loan Scheme

The Indian government has implemented the SME Loan Scheme to assist small and medium-sized enterprises with their working capital requirements. This business loan scheme allows new or existing businesses to access loans of up to Rs. 1 crore.

Usually, it takes about 8-12 days for the loan to be processed. Also, it only takes 59 minutes to approve/decline the application (unbelievable, right!).

Another interesting point to note about this loan program is that businesses can obtain the loan at a rate of 8% interest. Additionally, female business owners are eligible for a 3% discount through this program.

2)  Pradhan Mantri MUDRA Yojana 

Pradhan Mantri MUDRA Yojana is an excellent government loan scheme for businesses in 2024. It is mostly appropriate for female business owners, service-oriented companies, and commercial dealings, among others.

MUDRA, also known as Micro Units Development and Refinance Agency Ltd., serves as a refinance support system for banks and NBFCs providing credit to small businesses.

The scheme offers unsecured credit with the opportunity for borrowers to extend the repayment period.

The following 3 loans are offered in MUDRA loan-

3) National Small Industries Corporation

This program is a valuable opportunity for entrepreneurs seeking financial support in areas such as technology, marketing, finance, etc. It is widely recognized as one of the top government programs for business owners.

NSIC provides the following 2 programs-

  • Marketing Support Program: Businesses can maximize the benefits of this program by utilizing marketing support via Partnership programs, Marketing Contest, among other methods. This can greatly assist in promoting the business and expanding its market reach through marketing efforts.
  • Credit Support Scheme: This scheme allows for obtaining financial aid for the purchase of raw materials, funding, marketing, and more.

4) SIDBI Loan

SIDBI stands for Small Industries Development Bank of India. It is known to be one of the oldest entities offering government business loans.

It mainly lends a helping hand to SME businesses in dire need of capital. SIDBI offers instant loans. However, it provides indirect loan schemes to NBFCs and SFBs.

An important point to note about this business loan scheme is that it offers loans between 10 to 25 crores. Remember, the loan term can vary up to 10 years. Interestingly, without any collateral, a loan of 1 crore can be taken through SIDBI.

5) Udyogini

Udyogini is an innovative program that provides funding and assistance to empower female entrepreneurs in India. Women-led businesses have the chance to obtain loans up to Rs 15 Lakh for their capital and operational requirements. Individuals aged between 18 and 55 and earning less than Rs 15 Lakh per year are eligible.

Women-run businesses are able to obtain loans worth up to Rs. 15 lakhs is required for their capital and operational requirements. No processing fees and no need for collateral make it easier for women entrepreneurs to access funding, reducing their financial burden.

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